2025-07-01 21:08

July 1 (Reuters) - U.S. auto sales rose in the second quarter fueled by demand for gasoline-powered vehicles, but the industry is bracing for a bumpy latter half to the year as President Donald Trump's tariffs will likely push prices higher. General Motors (GM.N) , opens new tab retained its top spot with a 7% rise in quarterly auto sales driven by demand for lower-cost crossover SUVs such as the Chevrolet Trax. Sign up here. The tariffs initially pulled forward demand from price-sensitive buyers, but that boost is expected to fade as higher prices take hold. Crosstown rival Ford Motor (F.N) , opens new tab reported a 14.2% rise in quarterly sales, while Toyota Motor's (7203.T) , opens new tab North American unit posted a 7.2% rise. The tariffs are expected to hit budget-friendly imported models, including Ford's compact Maverick pickup and GM's Trax, denting affordability concerns as the average new-vehicle price nears $50,000. "Much of the pull-ahead demand that fired up sales in April and May has now been satiated, so consumer demand is expected to be weaker in the coming months," said Charlie Chesbrough, senior economist at Cox Automotive. Overall, U.S. new vehicle sales in June stood at around 1.25 million units, which represent a seasonally adjusted annual rate of 15.34 million units, according to data released by Wards Intelligence on Tuesday. Hyundai Motor (005380.KS) , opens new tab also notched a 10% year-over year rise in U.S. sales during the quarter. "The second half is going to be challenging. There's a lot of headwinds out there. Interest rates are still very high, obviously you've got the political swirl," said Randy Parker, CEO of Hyundai Motor North America. Pat Ryan, CEO of car-shopping app CoPilot, said higher vehicle prices were nudging buyers toward the used market, although he expects buyers to find it "more challenging." https://www.reuters.com/business/autos-transportation/us-second-quarter-auto-sales-set-rise-tariffs-may-drive-up-prices-2025-07-01/

2025-07-01 21:04

NEW YORK (July 1) - - TRADING DAY Making sense of the forces driving global markets Sign up here. By Lewis Krauskopf, Markets Reporter Jamie is enjoying some well-deserved time off, but the Reuters markets team will still keep you up to date on what moved markets today. We're watching President Donald Trump's tax cut-and-spending bill, which made it through the U.S. Senate on Tuesday and now goes back to the other U.S. legislative body, the House of Representatives. I'd love to hear from you, so please reach out to me with comments at Lewis.Krauskopf@thomsonreuters.com , opens new tab Today's Key Market Moves Today's Key Reads Sweeping US fiscal bill moves ahead, rate path stays murky President Donald Trump's U.S. fiscal bill took a key step forward on Tuesday, carrying with it possible risks and rewards for investors. The legislation, narrowly passed by the U.S. Senate, would extend Trump's 2017 personal and business tax cuts, otherwise due to expire at the end of this year, and give new tax breaks in areas such as tipped income and overtime. Investors hope the tax easing might provide stimulus that supports consumer spending. But, according to nonpartisan analysts, the bill would add an estimated $3.3 trillion to the nation's debt. Growing deficits are continuing to cloud financial markets, especially after Moody's cut America's pristine sovereign credit rating in May. The bill still must pass the House of Representatives, where Trump's Republican party holds a slim majority, and it remains to be seen if it will become law by Trump's hoped-for deadline of the July 4 Independence Day holiday. Focus was also on the Federal Reserve, and when the U.S. central bank may next cut interest rates. At a central bank gathering in Portugal, Fed Chair Jerome Powell reiterated the need to understand the impact of Trump's tariffs on inflation before lowering rates. But Powell also declined to rule out a possible rate cut at the Fed's July 29-30 meeting. Markets also seemed to include such a possibility: Fed Fund futures were baking in a roughly 20% chance of a cut at the July meeting, with chances deemed much more likely at the Fed's September meeting. The rate path could become more clear with economic data in coming days, including the monthly U.S. jobs report on Thursday. The dollar, which has fallen steeply this year, edged lower against a basket of major currencies. In a mixed day on Wall Street, the S&P 500 and Nasdaq pulled back from record high levels, while another major U.S. index, the Dow Jones industrial average, moved closer to a record peak. A 5% drop in Tesla shares weighed on the Nasdaq and S&P 500. Trump threatened to cut off subsidies for companies run by Tesla chief Elon Musk, escalating tensions between the one-time allies who have since fallen out. Musk, who spent hundreds of millions on Trump's re-election, had renewed his criticism of the fiscal bill, which would eliminate subsidies for electric vehicle purchases that have benefited Tesla. Tesla shares could get another jolt on Wednesday when the EV carmaker releases its quarterly delivery figures. What could move markets tomorrow? Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. Trading Day is also sent by email every weekday morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here. https://www.reuters.com/business/global-markets-trading-day-2025-07-01/

2025-07-01 20:58

Trump says India ready to lower barriers for U.S. companies July 9 deadline for deals approaches Trump suggests higher tariff for Japan WASHINGTON, July 1 (Reuters) - The United States could reach a trade deal with India that would help American companies compete in the South Asian country and leave it facing far lower tariffs, President Donald Trump said on Tuesday, while casting doubt on a possible deal with Japan. Trump told reporters aboard Air Force One that he believed India was ready to lower barriers for U.S. companies, which could pave the way for an agreement staving off the 26% rate he announced on April 2, before pausing it until July 9. Sign up here. "Right now, India doesn't accept anybody in. I think India is going to do that, if they do that, we're going to have a deal for less, much less tariffs," he said. Earlier, Treasury Secretary Scott Bessent told Fox News that the U.S. and India are nearing a deal that would lower tariffs on American imports to the South Asian country and help India avoid levies from rising sharply next week. "We are very close with India," Bessent told Fox News in response to a question about progress on trade negotiations. Indian officials extended a visit to Washington last week through Monday to try to reach agreement on a trade deal with President Donald Trump's administration and address lingering concerns on both sides, Indian government sources told Reuters. A White House official familiar with the talks said the Trump administration plans to prioritize securing trade deals with countries including India ahead of Japan in the days leading up to the July 9 deadline. India is one of more than a dozen countries actively negotiating with the Trump administration to try to avoid a steep spike in tariff rates on July 9, when a 90-day tariff pause ends. India could see its new "reciprocal" tariff rate rise to 27% from the current 10%. The U.S.-India talks have hit roadblocks over disagreements on import duties for auto components, steel, and farm goods, ahead of Trump's deadline to impose reciprocal tariffs. "We are in the middle -- hopefully more than the middle -- of a very intricate trade negotiation," Indian Foreign Minister Subrahmanyam Jaishankar told an event in New York on Monday. "Obviously, my hope would be that we bring it to a successful conclusion. I cannot guarantee it, because there's another party to that discussion," said Jaishankar, who is in the U.S. for a meeting of the China-focused Quad grouping. He added that there "will have to be give and take" and the two sides will have to find middle ground. TRUMP SUGGESTS HIGHER TARIFF FOR JAPAN Bessent told Fox News that different countries have different agendas for trade deals, including Japan, which Trump complained about on Monday and again on Tuesday. Trump said he was not thinking of extending the July 9 deadline and would simply send letters notifying countries of the tariff rate they would face. "We've dealt with Japan. I'm not sure we're going to make a deal. I doubt it," Trump told reporters aboard Air Force One as he returned to Washington from a trip to Florida. Trump suggested he could impose a tariff of 30% or 35% on imports from Japan - well above the 24% tariff rate he announced on April 2 and then paused until July 9. He said Japan was refusing to accept U.S.-grown rice, a demand made by Washington that he described as "an easy one," while selling millions of cars in the United States. "So what I'm going to do, is I'll write them a letter saying we thank you very much, and we know you can't do the kind of things that we need, and therefore you pay a 30%, 35% or whatever the numbers that we determine," he said. So far, only Britain has negotiated a limited trade deal with the Trump administration, accepting a 10% U.S. tariff on many goods, including autos, in exchange for special access for aircraft engines and British beef. https://www.reuters.com/world/india/we-are-very-close-with-india-trade-deal-bessent-tells-fox-news-2025-07-01/

2025-07-01 20:46

Senate bill complicates new wind, solar projects Bill could lead to higher utility bills, job losses House urged to improve usability of wind, solar tax credits WASHINGTON, July 1 (Reuters) - The U.S. Senate's massive budget bill that passed on Tuesday will make it harder to develop wind and solar energy projects, despite the removal of some contentious provisions, industry advocates and lawmakers said. The Senate dropped a proposed excise tax on solar and wind energy projects that don't meet strict standards after last-minute negotiations with key Republican senators seeking better terms for renewables. Sign up here. Iowa Senator Joni Ernst, fellow Iowa Senator Chuck Grassley and Alaska Senator Lisa Murkowski, whose votes were crucial to the bill's passage, had introduced an amendment calling for removal of that tax, which caught lawmakers by surprise after it made it into the last draft text. Many Republican states host large renewable energy industries. The Senate also changed language about which solar and wind projects can use the 2022 Inflation Reduction Act’s tax credits. In the Senate's final version, projects will be able to use the lucrative credits if they begin construction before 2026. A previous version was based on when the projects enter service. But overall, the Senate bill will make it too challenging to move forward with many new wind and solar energy projects, likely depriving the United States of added electricity capacity at a time of soaring energy demand, critics said. That could mean higher consumer bills and lost jobs around the country at project sites dependent on the credits. "Senate Republicans just voted to trigger the largest spike in utility bills in American history," said Lena Moffitt, executive director at climate advocacy group Evergreen Action. The Trump administration has brushed off criticism of the bill's aggressive phase out of renewable energy tax credit and its impact on grid stability and power prices, saying that ending these subsidies will pave the way for preferred baseload energy like gas and nuclear. "The One Big Beautiful Bill removes the nonsense and distortions from energy markets and unleashes American business to produce energy that works WITHOUT subsidies!," Energy Secretary Chris Wright said on X. President Donald Trump said the package that would slash taxes, reduce social safety net programs and boost military and immigration enforcement spending priorities. Research firm C2ES estimated that the United States will lose 2.3 million jobs as a result of the bill. Another research firm, Energy Innovation, projected that the bill would result in a fall of 300 GW of electricity capacity at a time of soaring demand due to data center and AI growth. Business and labor groups earlier this week had blasted the bill's phaseout of tax credits. The Senate bill effectively phases out renewable energy tax credits after 2026 if projects haven't started construction. Otherwise, wind and solar projects whose construction starts after that must be placed in service by the end of 2027. Community solar project developers warned that the bill would stop in their tracks thousands of projects already under development. "This bill will strand thousands of energy projects under development, jeopardize billions of dollars in private investment, and kill hundreds of thousands of good-paying American jobs — from electricians to contractors to local landowners and farmers who rely on these projects for stability," said Jeff Cramer, president of the Coalition for Community Solar Access. Meanwhile, the bill included a new tax credit for coal used in steel making that had been typically available only for critical minerals used in weapons making and green energy. Opponents said that could lead to hundreds of millions of dollars in subsidies for an industry that has suffered in recent years. Heather Reams, president of conservative clean energy group Citizens for Responsible Energy Solutions, praised the bill for preserving tax credits to boost hydrogen, nuclear energy, geothermal and hydropower, as well as carbon capture technologies. But she urged House lawmakers to try to make the wind and solar tax credits more useable. “As this bill moves back to the House, we encourage members to maintain their support for these critical tax provisions, which bolster domestic energy generation to secure true American energy dominance,” she said. https://www.reuters.com/sustainability/climate-energy/despite-last-minute-changes-senate-bill-deals-big-blow-renewable-energy-2025-07-01/

2025-07-01 20:42

WASHINGTON, July 1 (Reuters) - U.S. President Donald Trump said on Tuesday he has two or three top choices to replace Jerome Powell as Federal Reserve chair. Powell, whose term ends in May 2026, was nominated by Trump to lead the U.S. central bank during his first administration. Sign up here. When asked abroad Air Force One whether he has a top choice to succeed Powell, Trump told reporters, "I have two or three top choices," but declined to provide further information. The Wall Street Journal reported last week that Trump is considering former Fed governor Kevin Warsh and National Economic Council director Kevin Hassett as replacements. Treasury Secretary Scott Bessent is also being pitched as a potential candidate, according to the newspaper, which also listed former World Bank President David Malpass and Fed governor Christopher Waller as potential nominees. According to the Journal, Trump has toyed with the idea of selecting and announcing a replacement as early as September or October. However, Bessent told Bloomberg TV on Monday that the Trump administration is considering using the next expected Federal Reserve Board of Governors vacancy in early 2026 for appointing a successor. Since returning to the White House in January, Trump has criticized Powell and other Fed governors for deciding not to lower interest rates, which are currently in the 4.25%-4.50% range. Fed chairs have long been seen as insulated from presidential dismissal for reasons other than malfeasance or misconduct, but Trump has threatened to test that legal premise with frequent threats to fire Powell. A Supreme Court ruling in May eased concerns that Trump could fire Powell as the justices called the Fed "a uniquely structured, quasi-private entity." https://www.reuters.com/world/us/trump-says-he-has-two-or-three-choices-replace-feds-powell-2025-07-01/

2025-07-01 20:07

RIO DE JANEIRO/SAO PAULO, July 1 (Reuters) - The executive secretary of Brazil's Finance Ministry said on Tuesday that a slowdown in twelve-month inflation in May and June should open an opportunity for the central bank to revise the monetary policy stance. "We complain about inflation and we should always worry about it, but it starts to fall in May and June, enabling us to review monetary policy and achieve lower interest rates in the country," secretary Dario Durigan told an event in Rio de Janeiro. Sign up here. In a unanimous decision last month, Brazil's central bank raised its benchmark interest rate to 15%, the highest since July 2006, and announced a "very prolonged" pause. The bank targets inflation at 3%, with a tolerance band of 1.5 percentage points in either direction. Consumer prices in Latin America's largest economy rose 5.32% in the twelve months through the end of May, a decline from the April annual reading of 5.53%, according to data from statistics agency IBGE. While June inflation figure was still not released, the latest reading of the IPCA-15 index showed that consumer prices stood at 5.27% in the twelve-month period through mid-June, falling from 5.40%. "Brazil's conditions are good and we will soon be able to reverse the rise in interest rates," Durigan said. In a separate event earlier on Tuesday, he also acknowledged a concern over the country's debt trajectory, but said the government needs time to implement a gradual fiscal adjustment. Brazil saw its public debt rise by 354.42 billion reais ($65.21 billion) in the year through May, driven mainly by interest expenses, which increased amid the central bank's tightening cycle to curb inflation. The expansion comes as markets remain skeptical that the inflation target will be met in the years ahead, given the government's continued increase in spending. Durigan said the government remains committed to achieving fiscal balance and is poised to meet its fiscal goals this year and the next if lawmakers approve proposals it has submitted to Congress. ($1 = 5.4354 reais) https://www.reuters.com/world/americas/brazil-finance-official-flags-debt-concern-urges-time-gradual-fiscal-adjustment-2025-07-01/